NEW YORK, June 27, 2017 /PRNewswire/ -- Spherix
Incorporated (NASDAQ: SPEX) an intellectual property development company committed to the fostering of technology and
monetization of intellectual property, today issued a letter to shareholders.
Dear Spherix Shareholders,
Our recent announcement of the Hoth Therapeutics deal has generated significant interest in understanding more about the
transaction and the exciting implications for Spherix. With that in mind, I'm going to provide you with more information on the
transaction and update you on why we believe this transaction has positioned Spherix for growth. I want each of you to know
that I see the fundamentals at Spherix stronger than at any time in the last few years and our path to value creation is moving
forward with focus.
Let me start by explaining that under the negotiated terms of the Hoth transaction, Spherix's monetary investment in Hoth is
fixed and we do not anticipate additional funding from Spherix to develop this unique compound. Management was conscious of
the development costs and time associated with bringing new drugs to market and we believe that Hoth will develop the BioLexa
platform without additional funding from Spherix. Hoth anticipates dramatically shorter time frames for FDA approval
because the BioLexa compound uses a combination of two previously approved drugs. As such, BioLexa can take advantage of
the shortened 505(b)(2) FDA testing procedures. Section 505(b)(2) testing can often take one quarter to one third the time
of new drug testing, which was an important consideration for Spherix.
The BioLexa drug that Hoth is developing, it is a unique, patent-protected compound that has achieved positive results in its
initial studies. BioLexa is not an untested compound. To the contrary, an initial study of Biolexa was conducted at
the University of Miami Miller School of Medicine, Department of Dermatology. That study showed
that Biolexa inhibited the growth of the staphylococcus bacteria associated with eczema. As stated in the study results,
"novel therapies that can reduce the bacterial loads of wounds would have significant clinical implications." Spherix
believes that positive test results, from a well-known and respected medical institution, supports the exciting development
prospects for this compound.
Moreover, Hoth is the exclusive licensee of BioLexa. The drug was developed at the University of
Cincinnati and uniquely treats eczema, without the dangers and side effects of traditionally prescribed topical
steroids. As topical steroids are one of the most common therapies for eczema, Hoth believes that the development of a drug
without these side effects gives it a competitive advantage in the multibillion dollar eczema market.
In addition to the uniqueness of the technology, Spherix considered the attractive returns and potential exits for this
investment that the dermatology space offers. Recent deals in this space include:
- Pfizer announced on May 16, 2016 that it would acquire Anacor for $5.2B, a price that represents a 55% premium over Anacor's share price on May
13 th
-
- Anacor's lead product was Crisaborole, a topical treatment for mild to moderate atopic dermatitis;
- May 13 th, 2016 – Mylan announced acquisition of topicals-focused specialty and
generics business for $950M;
- April 22 nd, 2016 – Allergan acquired Topokine Therapeutics, a company
specializing in topical cosmetic dermatology treatments for $85M upfront.
As a result of this type of activity, we believe that large pharmaceutical companies recognize the substantial unmet need for
novel and safe treatments in dermatology, such as atopic dermatitis, and are actively seeking out assets with near term revenue
potential.
As part of our effort to drive shareholder value, management believes Hoth may represents the opportunity for several
potential exits for our investment. Management understands our shareholders' desire to see a tangible investment result
that they can quantitatively determine or even hold in their hands. It is our hope that the dermatological space and Hoth
will provide that type of shareholder opportunity.
The Hoth investment is also synergistic for Spherix, as we will be contributing support for Hoth's patent portfolio and with
the FDA approval process. Spherix's general counsel, Mr. Darrell Dotson, was formerly
an in-house patent lawyer at one of the largest biotechnology companies in the world, with annual revenues of over $15 billion. Mr. Dotson also holds a Ph.D in Biochemistry and Molecular Biology, so he is familiar with
the technology held by Hoth. Moreover, Spherix's Chairman, Robert Vander Zanden, has 10
years of experience with the FDA approval process, which we anticipate will add significant value to Hoth.
In addition to Hoth, our patent monetization efforts are continuing with Equitable IP. There are five cases on file,
working their way through the judicial system. In addition, our efforts with Equitable have secured the monetization rights
to over 100 new patents that are largely unlicensed. These patents came from a global network company focused on managed
security, network, voice and data services and are all related to improvements in optic fiber transmission, which is a growing
field. The patents have priority dates going back to the late 1990s and have been widely cited by patents filed by leading
technology companies. Our unique relationship with Equitable allows us to monetize these assets without incurring
litigation costs and we anticipate additional litigations filed soon. We continue to work with Equitable to deliver value
from these patents.
To keep you more informed and educated about our efforts, the Company will increase our outreach efforts our
shareholders. We anticipate attending more conferences and being more proactive with our shareholder updates. We will
also be posting more information about Hoth Therapeutics on our website, as soon as the deal closes. We have reached
agreement with Hoth on all material terms and the closing documents are being prepared. By providing more
information about Hoth and our involvement, it is our hope that our shareholders will more fully understand and appreciate the
value of the business we are building.
This remains an exciting time for Spherix and one where we are poised for growth. Spherix has no debt and a lower
quarterly burn than in the past 4 years. I see the fundamentals at Spherix stronger than at any time in the last few years
and the path to value creation is moving forward with focus and conviction.
I thank you for your continued support of Spherix.
Sincerely,
Anthony Hayes
About Spherix
Spherix Incorporated was launched in 1967 as a scientific research company. Spherix is committed to advancing
innovation by active participation in the patent market. Spherix draws on portfolios of pioneering technology patents to
partner with and support product innovation.
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal
securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue,"
"predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current
expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue
reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date
of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various
risks and uncertainties, including without limitation those set forth in the Company's filings with the Securities and Exchange
Commission (the "SEC"), not limited to Risk Factors relating to its patent business contained therein. Thus, actual results could
be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new
information, future events or otherwise, except as required by law.
Contact:
Investor Relations Inquires:
Spherix Investor Relations
Phone: (212) 745-1373
Email: investorrelations@spherix.com
Spherix Inc. Contact:
Phone: (703) 992-9325
Email: info@spherix.com
www.spherix.com
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SOURCE Spherix Incorporated